To make big money in the stock market, the ability to hold stocks requires hard work and learning. Whether you have the ability to study indices or choose stocks, the real skill that can make you make money is how to hold stocks. Newcomers die from chasing high prices, while experienced traders die from buying low prices. This sentence is often heard in the stock market. Of course, the ideal for every stock trader is to buy at the lowest point of a stock and then continue to rise. But how can we buy at the lowest point of a stock and achieve perfect bottom buying? Today, I will share with you some bottom fishing techniques!
1、 Timing for bottom fishing
(1) After a long-term decline, the trading volume of the stock index has relatively shrunk and continued to operate at historical levels, indicating a basic balance between long and short positions and a depletion of short selling power.
(2) The market is warming up, with warm winds blowing in the fundamentals and policies. Public opinion is highly consistent in implementing the policy requirements of maintaining stock market stability, slowing down or stopping new stock issuances, releasing sufficient liquidity in the open market to support the development of the capital market, and stabilizing and improving peripheral stock markets.
(3) Arc bottom. At the bottom of the market, the energy of the bears is gradually weakening, but the advantages of multiple forces are not suddenly increasing, but slowly emerging. This often occurs, but it is also difficult to judge. But one characteristic is that the K-line entity is very small, but it gradually increases.
(4) The short-term technical moving average has recovered, with two or more continuously rising low points and a time span of more than a month, such as the K-line signal appearing after 998 and 1664 points in the Shanghai Composite Index.
(5) The bottom of the K-line trend chart continues to rise, and from the daily K-line perspective, there are more bullish lines and fewer bearish lines. The stock price fluctuates between highs and lows, with ups and downs, but the bottom continues to rise. When a high-volume long yang breaks through the previous high point, it marks the completion of the main force's position building. If the stock price reaches the limit up but the trading volume is low, it indicates that a large number of circulating chips have been locked in by the main force.
(6) The market valuation is reasonable, and there are certain investment varieties emerging. For example, excluding large cap stocks, the average price to earnings ratio of the two markets has decreased to 20-25 times, and the average stock price has fallen to a historical low point, which can attract new long-term buyers to enter the market.
2、 Stock selection criteria:
1. Hot Plate Leading Varieties
When selecting stocks and hotspots, first look for the hot sectors. Stocks in hot sectors are the focus of attention for the entire market, with funds paying close attention to them. For example, since the 2610 point rebound, the SME board and the ChiNext board have always produced a number of limit up boards, especially the second tier stocks, which are at the forefront of the limit up trend and can be regarded as leading varieties. So, when selecting stocks, priority should be given to selecting the sub new stocks from these two major sectors, and the best ones should be chosen. What we need to do is to search for the hot topics and leading varieties of the day when the market opens every day.
2. Washing the plate and stepping on it will not break the support
Generally, for stocks that have support during the washout and retracement period, it is better to have a good grasp. If there is a period of increase in the early stage and it is not detected and followed up in a timely manner, then during the washout and retracement period, it is necessary to check whether to follow up based on the support situation and judge whether it can reach the limit up according to the language of the market.
The support must also meet the following conditions if the washing plate cannot be broken by stepping on it:
a、 Generally, a relatively complete and obvious rise and fall usually lasts for 7-9 days, and for K-lines that are washed up and retraced, this condition must also be met. 5-7 days and 7-9 days are generally more suitable for stopping the decline and stabilizing.
b、 The washing of the K-line should be reduced in volume, with a focus on small yin and small yang, and occasionally a medium yin line without volume. Although the form is unsightly, it does not break through the key price range and the volume is depleted, resulting in reduced selling.
